System for managing a stable value protected investment plan

ABSTRACT

Method and system to track, reconcile and administer the values of life insurance policies in separate accounts, including Stable Value Protected funds. Accordingly, targeted returns are translated into unit values on a daily basis for each fund. Additionally the system tracks restrictions (e.g., timing, amount of withdrawal and amount of reallocations) on a premium-by-premium basis, and tracks the book value, market value, duration and targeted return on a client-by-client basis. The system calculates and tracks the payments and credits applicable to a withdrawal or reallocation request, in addition to the liquidation schedules for each fund based on the payment amounts and credits of specific funds. Additionally, daily unit values are calculated given a periodic targeted return (i.e., a quarterly targeted return).

BACKGROUND OF THE INVENTION

1. Field of the Invention

This invention relates to an automated system for tracking, reconcilingand administering the values of life insurance policies in separateaccount, including stable value protected funds.

2. Discussion of the Background

For many years the majority of employee benefits have been fundedthrough the purchase of stocks, mutual funds, corporate owned lifeinsurance (COLI) and annuities. The value of these assets was generallyprovided on a quarterly or monthly basis, and the liabilities of thesebenefit plans have generally been made available on an annual or perhapsquarterly basis. Therefore, plan sponsors have had to wait six to twelvemonths for information about the current funded status of a benefitplan. In addition, changes in the tax code in the past few years havereduced benefits to highly compensated employees (HCE), that is, personsearning over $60,000 to $70,000 per year, as defined in the tax code.

In response to this decrease in benefits, companies are installing planscommonly known as Non-Qualified Deferred Compensation (NQDC) plans whichoffset some of the benefits being lost. By deferring money tax-free fromemployees and investing the deferred money in Elective Deferral DefinedBenefit plans or Elective Deferral Defined Contribution plans, the NQDCplan helps employees regain lost benefits. Elective Deferral Benefitplans offer various fixed returns on the deferred salary (or otherbenefits) of an employee depending upon the amount of money deferred andthe number of years the money is deferred. A deferral of a $1,000 willbe used as an example. The plan promises a 7.5% return each year untilthe normal retirement age of 65. If the deferral is made at 64, then thematurity value is $1,075, and the balance is paid out in a lump sum. Ifdesired, a participant may choose to retire early, at any age afterturning 55. If a participant retires before age 65, the account balancepromised at 65 is reduced by 7% for each year prior to age 65. If aparticipant leaves the company prior to attaining age 55, theparticipant is given the initial deferral plus a 5% interest credit foreach year since the initial deferral. If a participant dies prior toretiring, the beneficiary receives the promised age 65 balanceimmediately.

Elective Deferral Defined Contribution plans work like investing inmutual funds. For example, when a deferral of $1,000 is made, theparticipant elects to invest his money in at least one of several fundssponsored by his employer. (Employers may offer several funds, e.g., aBond fund, a Balanced fund, a fund which tracks the “Standard & Poor's500” average minus a fixed percentage, etc.). At the time of deferral,the employee selects the Bond fund trading at $100/unit. The $1,000 isconverted into 10 units based on the value of the fund on the day thatthe deferral is made. As the plan sponsor hold the liability for theemployee/plan participant, the unit value is then adjusted daily toreflect the net value of the fund, plus any dividends or accruals paid.The value of the employee's investment is equal to the number of unitsmultiplied by the unit value of the fund on the day of conversion.Therefore, if the per unit value of the Bond fund was $175, then theinvestment would be worth $1,750. Plan participants may also transferdeferred payments between Defined Contribution and Defined Benefit plansand between funds in the Defined Contribution plans.

However, the funds are hypothetical funds used to determine the returndue to an employee and need not correspond to any real fund directly.For example, when a deferral is made to the bond fund, the plan sponsormay not actually choose to buy any funds relating to bonds, the plansponsor may actually buy stocks, insurance policies or other annuitiesinstead. The plan sponsor only promises to provide the return of thehypothetical fund (e.g., the rate of increase of the “Standard andPoor's 500” minus some fixed percentage, the real value of the “Standardand Poor's 500” minus some fixed dollar amount, etc.). In fact, in caseswhere an asset group is overfunded (i.e., the assets exceed theliabilities), the excess assets may be transferred to other under-fundedplans.

Furthermore, the regulations that apply to these plans restrict themanner in which these plans can be funded. In essence, companies may notdirectly fund the liabilities created by these plans, whereas thecompanies can directly fund their qualified plans. Instead of providingdirect funding, a plan sponsor invests the unsecured deferrals infinancial instruments of the plan sponsor's choosing (e.g., mutualfunds, variable policy insurance policies, etc.) to cover the liabilitycorresponding to each participant's investment choices. Because plansponsors may not actually be investing in funds similar to the fundsrequested by the plan participants, plan sponsors need to have moreimmediate access to information regarding their plans. This enables thesponsor to cover its liabilities by reallocating its assets asparticipants reallocate their assets. The volume and timeliness ofinformation is critical to a successful NQDC plan, and the traditionalmethods of providing information quarterly or annually have proven to beunacceptable. Since plan sponsors are receiving information and changeson a daily basis, the chances of a mismatch between the values of planassets and liabilities have traditionally been high. Finally,participants were previously largely uninformed as to the value of theirdeferred money and benefits. Participants traditionally received astatement once a year, with no projections, and little information as tohow the benefit was calculated. The dearth of information available tosponsors and participants has caused many companies to avoid the use ofNQDC plans, thereby denying participants a chance at benefitrestoration.

In addition to NQDC plans, corporate owned life insurance policies arean efficient funding mechanism for employee benefits. The nature of COLIallows corporations to invest money in mutual fund-type investments andultimately receive the growth on the investment tax free. Typically,corporations have had to account for this investment on a mark-to-marketbasis. This means that the underlying investments were valued at marketeach year and therefore were subject to the volatility of theinvestment. This has caused some corporations to avoid COLI purchases,even though as a long-term investment it is highly advantageous forcorporations.

One solution to the above problem is to invest in a new and usefulinvestment division known as a Stable Value Protected Investment. Thisinvestment smoothes the return associated with the underlyinginvestment. For example, over the long term, the Standard and Poor's 500may be expected to increase by 10% annually. However, during the longterm, the annual returns may be +15%, −2%, +8%, −5%, etc. In order tosmooth the returns, the investments in a Stable Value ProtectedInvestment would create returns of 10%, 6%, 8%, 6%, etc. Over thelong-term, the Stable Value Protected Investment would perform equal tothe underlying investment, less the fee for the Stable Value Protection,but would provide smoothing along the way.

Another use for the Stable Value Protected Investment is to reduce theimpact of initial fees associated with the purchase of COLI. First yearfees include Premium Tax, Deferred Acquisition Cost (DAC) Tax and SalesLoads. The assessment of these fees has the effect of decreasing thecorporation's return on its investment for the first few years. Asolution to the initial decrease is to increase the return on the StableValue Protected Investment initially, then use the smoothing nature ofthe Stable Value Protection in future years to “pay back” the initialincrease. For example, the targeted return calculated by the StableValue Protection writer may be increased by 3% for the first year, 2%for the second year and 1% for the third year in order to reduce theperceived impact of the first year expenses on the cash value of thepolicy.

The Stable Value Protected funds provide an initial targeted return forthe first period of an investment. Upon completion of the first period,the value of the fund, the “market value,” is compared with the“calculated” value of the fund which is the “book value.” The“calculated” value of the fund is calculated by multiplying the initialvalue of the fund by (1+targeted return), wherein the targeted returnfor the next period is calculated using the formula:TR=[(MV/BV)^((1/D))×(1+YTM)]−1,where CR is the targeted return, MV is the market value of a fund, BV isthe book value of a fund, D is the duration of a fund and YTM is thecurrent yield to market. The purpose of this calculation is to insurethat the book value and the market value move closer together over aperiod of time, namely the duration of a fund. The targeted return isreached by investing in a security whose value fluctuates daily andwhose purpose is to make up the difference between the actual return andthe targeted return.

The duration of a fund was first described by Frederick A. Macaulay inSome Theoretical Problems Suggested by the Movements of Interest Rates,Bond Yields, and Stock Prices in the United States Since 1866, publishedby the National Bureau of Economic Research in 1938 and incorporatedherein by reference. The duration of security provides a measure of boththe coupon of a bond and the term to maturity. Macaulay showed thatduration was a more appropriate measure of the time element of a bondthan term to maturity because it takes into account not only theultimate recovery of capital at maturity, but also the size and timingof coupon payments that occur prior to final maturity. Duration isdefined as the weighted average time to full recovery of principal andinterest payments, using annual compounding. Duration (D) is defined as:

$D = \frac{\sum\limits_{i = 1}^{n}\;\frac{C_{t}(t)}{\left( {1 + i} \right)^{t}}}{\sum\limits_{l = 1}^{n}\;\frac{C_{t}}{\left( {1 + i} \right)^{t}}}$where t=the time period in which the coupon and/or principal paymentoccurs, C_(t)=the interest and/or principal payment that occurs inperiod t and i=the market yield on the bond. The denominator in theequation for duration is the price of an issue as determined by thepresent value model, and the numerator is the present value of all cashflows weighted according to the length of time until receipt. Thisconcept of duration is also disclosed in ANALYSIS AND MANAGEMENT OFBONDS, Chapter 18— PRINCIPLES OF BOND EVALUATION, by Frank K. Reillywhich is incorporated herein by reference.

Using the concepts of duration and targeted return, the actualperformance of the underlying securities in the fund is smoothed overtime. The funds are created on a client-by-client basis, and thereforeeach client is subject to its own past performance when its targetedreturn is calculated. Consequently, each client will have a differenttargeted return.

SUMMARY OF THE INVENTION

It is therefore an object of the present invention to overcome thedisadvantages of the prior art systems.

It is another object of the present invention to provide a systemcapable of tracking and reporting assets and liabilities on a nearreal-time basis, a system that can project assets and liabilities intothe future, and a system that makes the administration of NQDC planssimple, while keeping costs low for plan sponsors.

It is a further object of the invention to provide a system capable oftracking liabilities in both Defined Contribution and Defined Benefitplans.

It is a further object of the present invention to provide planparticipants with timely access to plan information using modem, fax orautomated voice response units.

It is yet another object of the present invention to provide plansponsors with timely access to liability information by determining planparticipants positions in the Defined Contribution and Defined Benefitplans.

It is yet another object of the present invention to provide plansponsors with a means for calculating the liabilities of a DefinedContribution plan by contacting an external data provider by phone todetermine the unit value of funds offered by the plan.

It is an additional object of the present invention to provide a meansfor the plan sponsors to determine plan assets by contacting externaldata sources to receive the values of insurance policies and financialinstruments held by the plan sponsor.

It is an additional object of the present invention to provide a meansfor associating liabilities with assets and measuring an absolute dollaror percentage difference between the liabilities and their associatedassets.

It is a further object of the present invention to provide a means ofreporting to a plan sponsor that the assets and liabilities of a planhave values outside of a specified ratio or differential.

It is a further object of the present invention to provide a means ofreconciling charges reported by an asset manager with internallycalculated values for what the changes should be based on knowntransaction and management costs.

It is an object of the present invention to track, reconcile andadminister the values of life insurance policies invested in separateaccounts, including Stable Value Protected funds.

It is a further object of the present invention to provide a system totrack, reconcile and administer life insurance policies in Stable ValueProtected funds which smooth the return associated with the underlyinginvestments and which amortize the initial fees associated with eachpremium payment over several years.

The above objects and other objects are achieved according to thepresent invention, by providing a computer system capable of trackingassets and liabilities for a NQDC plan stored in the computer system.The computer system determines the value of assets in the plan bycalling an information warehouse (e.g., the Dow Jones Bulletin BoardService, insurance companies, investment companies, etc.) and requestingthe current unit value of each asset held by the plan sponsor. Thenumber of units of each asset times the value of each asset determinesthe current total asset value of the fund.

On the other hand, the total liabilities are calculated so they can becompared against the total assets. The total liability of a DefinedContribution plan is determined by multiplying the number of fund unitsheld by plan participants in each fund by the unit values for the fundsfor that particular day. The number of fund units a participant buyswhen a user defers money is calculated in the computer system byconverting the dollar amount of a user transaction (deferral, transferamong funds, realignment of fund allocation) into a number of fund unitsthat the user can purchase for that amount on the day the transaction ismade.

The current system draws on the teachings of actuarial statistics toestimate/predict statistically what assets are needed to cover incurredliabilities. Additional books covering the subject of actuarialstatistics/mathematics are Actuarial mathematics by Newton L. Bowers,Jr., et al., Society of Actuaries' textbook on life contingencies byChester Wallace Jordan, Jr. and The theory of interest and Fundamentalsof numerical analysis, both by S. G. Kellison; the subject matter of thebooks is incorporated herein by reference.

The above objects relating to tracking, reconciling and administeringthe values of the life insurance policies in separate accounts,including Stable Value Protected funds, are achieved according to thepresent invention by providing a computer system for managing aninsurance product purchase. According to the present invention, thetargeted returns are translated into unit values (UV) on a daily basisfor each fund. To perform these functions, the present inventioncalculates and stores, for each fund, the following: the fund duration,the portfolio allocation, the targeted return given the market value andduration of the fund, the current yield-to-market, and the stored bookvalue. The invention further tracks restrictions (e.g., timing, amountof withdrawal and amount of reallocations) on a premium-by-premiumbasis, and tracks the book value, market value, duration and targetedreturn on a client-by-client basis. The invention also calculates andtracks the payments and credits applicable to a withdrawal orreallocation request in addition to the liquidation schedules for eachfund based on the payment amounts and credits of specific funds.Additionally, the present invention calculates daily unit values given aperiodic targeted return (i.e., a quarterly targeted return).

BRIEF DESCRIPTION OF THE DRAWINGS

A more complete appreciation of the invention and many of the attendantadvantages thereof will be readily obtained as the same becomes betterunderstood by reference to the following detailed description whenconsidered in connection with the accompanying drawings, wherein:

FIG. 1 is a layout diagram of the system according to an embodiment ofthis invention;

FIGS. 2A and 2B are flowcharts of the daily operation of the system ofthe present invention;

FIG. 3 is a flowchart showing how current assets are updated for DefinedContribution plans;

FIG. 4 is a flowchart showing how liabilities are updated for anElective Deferral Defined Contribution plan;

FIG. 5 is a report showing a hypothetical set of assets and liabilitiescontained within a Deferral Defined Contribution plan and FIG. 5 alsoshows the tolerance parameters defined to indicate now closely theassets should correspond to the liabilities;

FIG. 6 is a flowchart showing how current assets are updated for aDefined Benefit plan;

FIG. 7 is a flowchart showing how estimated liabilities are updated foran Elective Deferral Benefit plan;

FIG. 8 is a report showing a hypothetical set of assets and liabilitiescontained within a Deferral Defined Benefit Plan;

FIG. 9 is a schematic showing devices for remotely receiving informationfrom the present invention by using a telephone as an input/outputdevice or by using a terminal/computer as the interface to the computersystem across a telephone line;

FIG. 10 is a graphic illustration of the processing cycle used by thepresent application for NQDC plans;

FIG. 11 is a flowchart showing the operation of the present inventionwhen a fund is created;

FIG. 12 is a flowchart showing the operation of the present invention ona daily basis;

FIG. 13 is a flowchart showing the operation of the present invention ona monthly basis;

FIG. 14 is a flowchart showing the operation of the present invention ona monthly policy anniversary basis;

FIG. 15 is a flowchart showing the operation of the present invention ona quarterly basis on the last day of the second month of the quarter;

FIG. 16 is a flowchart showing the operation of the present invention ona quarterly basis ten days prior to the beginning of a quarter; and

FIG. 17 is a flowchart showing the operation of the present inventionupon the death of an insured fund participant.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

Referring now to the drawings, wherein like reference numerals designateidentical or corresponding parts throughout the several views, FIG. 1 isa view showing an embodiment of the system of the present invention.Within a computer 2, there are provided: a central processing unit for amemory subsystem 6, a fax/modem card 8, an automated voice response unit10, a digital storage means 12, a low density removable medium storagemeans (e.g., a floppy disk drive) 14 and a high density removable mediumstorage means (e.g., compact disc drive or tape drive) 16. Furthermore,keyboard 18 and monitor 20 are connected to the computer system 2 forinputting and outputting data, respectively. An additional printer 22for printing reports 24 is also provided.

The heart of the computer system 2 is the central processing unit 4which can comprise any one of the commercially available centralprocessing units (e.g., Intel 80×86, Motorola 680×0, Power PC, etc.) todirect and coordinate the activities of the other components of thepresent system. The memory subsystem 6 comprises a combination of readonly memory (ROM) and random access memory (RAM), and the memory'ssubsystem 6 stores commands to be executed by the central processingunit 4. Together the central processing unit 4 and memory subsystem 6control the other devices of the system. A fax/modem, connects to atelephone line (now shown) to transfer information between the computersystem and fund managers, insurance and annuity carriers, investmentcompanies, plan sponsors and plan participants. The fax half of thefax/modem 8 additionally is used to send confirmations to planparticipants when they make trades between funds or between the DefinedContribution and Defined Benefit plans. One such fax/modem that iscommercially available is the Practical Peripherals 144FMT, whosetechnical manual and operations manual are incorporated herein byreference. The modem half of the fax/modem 8 sends and receivesinformation from plan sponsors and participants' remote computers, byusing an installed bulletin board service (BBS) program which runs onthe computer system 2. The BBS program in an alternate embodiment is runon a second computer system 2 and exchanges information with the firstcomputer system 2. In another alternate embodiment (not shown), the faxand modem are separate components of the computer system 2. In yetanother embodiment, multiple fax/modems, fax-boards or modems areinstalled in the computer system 2 to provide connections to multipleplan participants or sponsors simultaneously.

The modem is additionally used to contact outside information providersand asset managers. In another embodiment of the present invention, themodem used to receive census data to update internal life expectancy andearly retirement information that is used to calculate liabilities. Suchinformation can be obtained from the U.S. Census Bureau.

The automated voice response unit (VRU) 10 likewise is connected to atelephone line (not shown) and is controlled by voice response unitcontrol software. In an alternate embodiment, the VRU control softwareruns on a different computer and either shares information with the maincomputer system 2 or receives a snapshot of the data to use whenproviding information to plan participants and sponsors. EdifyCorporation commercially provides such software under the tradenameElectronic Workforce. Electronic Workforce runs on IBM compatiblemachines running OS/2 2.1 or later. Electronic Workforce also interactswith various databases on the digital storage means 12. In an alternateembodiment, a combination of fax/modem 8 and an automated response unit10 are used to provide the requested information. By using the automatedresponse unit 10, a plan sponsor or participant requests informationfrom the computer system 2. The requested information then is faxedusing the fax/modem 8 to a number entered into the automated responseunit 10 when the information was requested. This enables the delivery ofreports on a near real-time basis.

Digital storage means 12 also is used to store both programs (e.g.,operating systems and user applications) and a database 13. The programsare loaded from the digital storage means 12 into the memory subsystem6, and they are then executed by the CPU 4. The database 13 ofinformation describes the assets and liabilities managed by the presentinvention. Currently available commercial databases such as DB2/2 forOS/2, Microsoft Access for Windows and Oracle's SQL server are suitablefor storing asset and liability information. Their corresponding UsersManuals are incorporated herein by reference. Additional programs andinformation can be written to the digital storage means 12 having beenread from the low density removable medium storage means 14 and highdensity removable medium storage means (e.g., compact-disc) 16 or havingbeen transmitted the computer system 2 via the fax/modem 8 or theautomatic voice response unit 10. The present invention further includesa computer readable media (e.g., high density removable storage means16) for controlling a computer to manage a non-qualified deferredcompensation plan. As is well known, a keyboard 18 additionally is usedfor entering data into the computer systems, and a computer monitor 20is used to display both graphical and textual information from thecomputer systems. A printer 22 prints reports 24 showing plan sponsorsand participants their present positions, including any positions ofplan sponsors which vary outside of predetermined ranges.

Moving now to FIGS. 2A and 2B, the operation of the system will bedescribed in terms of a daily schedule. In the morning, the computersystem 2 performs step 30 and uses the fax/modem 8 to call aninformation provider (e.g., the Dow Jones Bulletin Board Service, aninvestment clearinghouse, a money manager, etc.) and downloads theprevious night's net asset values for all hypothetical funds provided bythe plan sponsor in the Defined Contribution plan (i.e., “Standard &Poor's 500”, Stock and Bonds). In step 31, the downloaded information isused to update the liability side of the database stored on the digitalstorage medium 12. In step 32, outstanding plan sponsor buy and sellinstructions are settled with the appropriate clearing houses by sendingrequests made by the plan sponsor from the computer system 2 to theclearing houses. These requests keep the plan sponsor's asset allocationmatched to the participants' liability allocations. Steps 30 and 32 willbe shown in FIGS. 4 and 7 in more detail. In step 33, new balances arecalculated for each participant based on the per unit values downloadedfrom the information providers. These balances are provided to the VRUcontrol software to enable the VRU to provide balance information toplan participants and sponsors. Although the data is a snap-shot of aparticipant's position, the snap-shot can be updated as frequentlyduring the day as desired in order to reflect changes caused by trades,etc. The computer system, in step 34, then calls the Asset Manager anddownloads the previous night's net asset values for all asset funds,confirms the previous day's trades and calculates a number of units perasset fund and their cash values. In step 35, additional data on chargesincurred by the plan sponsor to cover management of funds and tradecosts are also downloaded, and the downloaded values are reconciled withinternal calculations of what the changes should be. The computer system2 then updates the asset side of the database 13 for the DefinedContribution and Define Asset plans, in step 36. Steps 34 and 36 areshown in more detail in FIGS. 3 and 6 for the Defined Contribution andDefined Benefit plans, respectively. In step 40, the assets andcorresponding liabilities are compared with preset limits to determineif the asset allocation indicates that the differences are beyond presetlimits. If any allocations are outside of their limits, the plan sponsoris notified in step 42 about the current asset levels. Whether the plansponsor is notified or not, the system continues with normal processingin step 43. Step 43 generates any daily payment instructions which wouldenable a plan participant to receive benefits from either the DefinedContribution or Defined Benefit plans. To keep plan participantsinformed about their investments, in step 44 fax confirmation of tradesare sent to participants; the faxed information provides theparticipants' new numbers of units and account balances. To keep plansponsors informed about the status of the offered plans, faxconfirmations of plan participant trades are also sent to the plansponsor in step 44. Electronic reports showing asset and liabilities foreach asset group are sent monthly via fax/modem transfer to plansponsors that can receive such information, and printed reports andcopies of reports on removable digital storage are sent by mail in step46 to other plan sponsors. In step 46, at the end of a day'stransactions, the account information is converted into a format for acommercial database system, and the database is updated with newparticipant information and mutual fund information in step 50. To helpwith calculating liability in the future and to calculate expectedreturns, census and other information can be retrieved from remotesources in step 51 and stored into the database 13. In addition, theasset manager and database 13 are updated in step 52 with data receivedthroughout the day from the Bulletin Board Service and the automatedvoice response unit 10.

The flowchart of FIG. 3 depicts one implementation of how the currentassets are calculated in the computer system of the present inventionfor Defined Contribution plans. A first asset group is read in step 60from a list of asset groups stored in a database 13 on the digitalstorage means 12. The asset manager is then contacted in step 62 todetermine the present cash value of the assets (i.e., stocks, mutualfunds, annuities) held by the plan sponsor which are linked to the firstasset group. In step 64, the number of each type of investment is alsoread from the database 13. The number of units of each asset ismultiplied by the corresponding unit value to create a value of theassets held. In the next step, step 68, the asset value stored in thedatabase 13 is updated with the calculated value so that it can becompared with the corresponding liabilities of the asset group, as wasexplained for step 40. This process of updating and storing asset valuesfor an asset group is performed for each uncalculated asset group ifstep 70 determines that some asset groups have not been updated.

The flowchart of FIG. 4 depicts a method of calculating the liability ofdeferrals for each hypothetical fund in an asset group for DefinedContribution plan as was performed in steps 30 and 31. In step 80, thecomputer system selects, from the database 13 stored on the digitalstorage means 12, one of the hypothetical funds being offered by theplan sponsor as a current fund. In step 82, the computer system uses thefax/modem to contact an information service provider to determine thecurrent selling price of the current hypothetical fund offered by theplan sponsor. In step 84, the number of outstanding units for thecurrent hypothetical fund is read from the database 13. This number ofunits is multiplied in step 86 by the current per unit selling price ofthe current hypothetical units to determine the present liability of theDefined Contribution plan for the current fund. Step 88 stores thecalculated value in the database 13 to be compared in step 40 with acorresponding asset value. Step 90 continues the updating process againat step 80 if there are more funds which have not been updated. When allfunds have been updated, step 90 ends the updating process.

The report of FIG. 5 is an Allocation Summary for a Defined Contributionplan showing how three sets of assets in an asset group are linked totheir corresponding funds. As an example of a fund link 100, the IncomeLink has an asset 102 indicated by the name “the XYZ's fixed income”with a current value of $1,932,315.03, which is 30.05% of the assetgroup's total assets. This asset is used to secure a plan sponsor'sposition for four funds 104: Priority Bond, Super Leveraged, Income &Growth and Balanced, totaling $5,250,827.90, which constitutes 47.32% ofthe liability for the whole asset group. The benchmark 106 for the fundlink 100 is shown as 5%; therefore, a report will be generated and sentto the plan sponsor to indicate that the current liability of 47.32% ofthe fund link is not within 5% of the current asset allocation of 30.05%of the fund for the defined asset group. In this way, the dollar valueof an asset for a fund link need not match the dollar value used tosecure the liabilities of a fund link. As long as the percentageallocation of total assets for a link match the percentage allocation oftotal liabilities for the link, the link is considered to be within thebenchmark. In this way, if the liability of an asset link of an assetgroup grows, the corresponding assets of the asset group can growproportionally.

The flowchart of FIG. 6 shows how the insurance policy asset values ofan Elective Deferral Defined Benefit plan are updated in the presentsystem. The computer contacts the asset manager of the Defined Benefitplan in step 110, and in step 112 requests the current cash values ofinsurance policies covering employees if the equity were to be removedon the current day. In step 114, the computer further requests thecurrent cash value of each policy to determine the value of the policyif each employee were to die. Using the information of steps 112 and114, the computer system generates an asset range in step 116 whichindicates the immediate and potential values of the Defined Benefit planbased on the outstanding insurance policies held by the plan sponsors.The asset range is then stored in the database 13 so the asset value canbe compared with the Defined Benefit Liability to determine if there isa mismatch in fund allocation.

The flowchart of FIG. 7 depicts how estimated liabilities are calculatedfor an Elective Deferral Defined Benefit plan as was performed in steps30 and 31. The liability is calculated as an estimated liability basedon the probabilities of dying, withdrawing or retiring at each age up toage 65. In the first step of computing an estimated liability, step 120,the computer system determines the payout for each deferral for a giveninterest rate if the corresponding participant removes his money at age65. The payout at age 65 is also the payout should the plan participantprematurely die before removing his money. In step 122, the age 65payout is multiplied by the probability of the corresponding participantreaching age 65, thus calculating an expected full payout. Likewise, theage 65 payout is multiplied by the probability of the correspondingparticipant dying at each age before 65 to determine an expectedpremature payout. In step 124, the computer system determines the payoutfor each age before 55 for each deferral if the correspondingparticipant withdraws from the program. By multiplying in step 126 thewithdrawal payout by the probability of withdrawal at each age beforeage 55, an early withdrawal payout is calculated. Furthermore, in step128 an early retirement payout is calculated for each age after 55 andbefore 65 of a corresponding participant for each deferral. The earlyretirement payout is multiplied in step 130 by the probability of earlyretirement for each age after 55 and before 65 to determine theexpected/estimated early retirement payout. In step 132, all expectedpayouts are summed to determine a total expected/estimated liability forthe Defined Benefit plan. This value is updated in the database 13 instep 134.

The report of FIG. 8 shows a current cash value of a Defined Benefitplan as calculated in FIGS. 6 and 7. The current cash value 140 isdetermined in FIG. 6, step 112, whereas the death benefit value iscalculated in FIG. 6, step 114. The estimated liability 144 iscalculated according to the method of FIG. 7, with the final resultbeing stored in step 134 of FIG. 7. In addition, because the benchmark146 for the Defined Benefit plan is indicated to be $10,000, thecomputer system, when implementing the process of FIG. 2A, woulddetermine that an asset allocation is outside of preset limits in step40 and notify the plan sponsor about the asset level using step 42.

As shown in FIG. 9, deferrals and changes to a plan participant's fundscan be made remotely using a telephone 150 or a computer terminal 152.Likewise, the plan sponsor can get information about the status of assetgroups using the telephone 150 or the computer terminal 152. Whenconnecting to the computer system 2 using the telephone 150, a planparticipant or sponsor is audibly provided with a series of choices in amenu. The plan participant or sponsor responds to the menu items usingthe keypad on the telephone 150. Illustrative remote operations whichcan be performed by plan participants using the telephone 150 includechecking the current value of deferrals, trading units between funds ina Deferral Defined Contribution plan, requesting projections about thefuture value of investments and requesting historical information onplan performance over a period of time. Illustrative remote operationsthat can be performed by the plan sponsor using the telephone 150 arechecking current asset values in an asset group, checking unit valuesfor hypothetical funds linked to the assets in the corresponding assetgroup, determining the total liability of each hypothetical fund in thecorresponding asset group and calculating if the values of theliabilities and assets are within the range specified by the benchmark.

Using the computer terminal 152 to correct to the fax/modem 8, the planparticipant or sponsor likewise receives information from the computersystem 2. The information is displayed on the monitor of the computerterminal 152 and data to be sent to the computer system 2 is input usingthe keyboard of the same computer terminal 52. Unlike the menu system ofthe telephone 150, the computer terminal 152 displays a series ofprompts (i.e., menus, dialogue boxes, input screens) for the planparticipant or sponsor instead of prompting using voice commands.Informational responses are sent from the computer terminal 152 to thecomputer system 2. The computer system 2 responds to requests by theplan participants or sponsor by sending a reply from the fax/modem 8across the telephone wire, and the results are displayed on the monitorof the computer terminal 152. The computer terminal 152 can either be astand-alone or networked computer, capable of general purpose computingbut running software to connect to the computer system 2, or a “dumb”terminal, only capable of terminal interactions. In another embodimentwhere the terminal is a stand-alone or networked computer, prompts fromthe computer system are converted from text to speech by the computerterminal and voice recognition software converts voice responses of theplan participant or sponsor into text to be sent to the computer system2.

Additional information to help calculate liabilities and assets may bereceived from remote terminals and information resource providers 154(i.e., the U.S. Census Bureau and insurance/actuarial data providers) asin step 51. This information is used to update the database 13 andchange the values used in steps 122, 126 and 130. Received information(i.e., economic indicators) is used in another embodiment to help plansponsors predict the value of assets and liabilities in the future.

Another system designed according to the present invention is used totrack, reconcile and administer the values of life insurance policies inseparate accounts, including Stable Value Protected funds. Each separateaccount contains divisions which correspond to the investment choices ofa particular company, and each insurance policy for each of theemployees working for the company making the investment may choose aninvestment. The system gathers information when a fund is created toensure that the insurance policies issued by an insurance carrier tocover a fund participant conform to government and insuranceregulations. As shown in FIG. 11, in step 1104, initially the systemprocesses census information about a fund participant, including theparticipant's birth data, name, sex and social security number. Based onthis information, tax information and the specific parameters of theselected insurance policy, in step 1108, the system determines premiumsfor the participant and a face amount for the policy assigned to theparticipant. The system of the present invention calculates the faceamount for the assigned policy, as well as 7 Pay premiums and guidelinepremiums for 7702 and 7702A compliance.

In step 1112, the system also calculates initial premium charges basedon premium taxes, DAC taxes, DAC refunds, loads, administration fees andthe cost of the insurance. The premium and DAC taxes and the loads arecalculated as a percentage of the premium, and the DAC refunds arecalculated as a percentage of current and previous premiums paid. Inaddition, administration costs and cost of insurance amounts arecalculated. Typically, the administration costs are flat costs perpolicy, while the cost of insurance is a factor times the Net amount ofRisk. This factor is based on the mortality rate for the employees whoare covered by the insurance policies in the fund, and this factor is apublished factor which the system can use to track investments.Typically, this factor includes both the percentage needed to cover thepolicy value when an insured person dies and an extra percentage whichrepresents potential profit for the insurance provider.

In step 1116, after the above calculations have been made, the systemreceives a notification from the insurance carrier of the paymentrequired to cover the policy, and notifies the investment manager of anamount to invest. Processing then continues with step 1120. In step1120, the system notifies any sub-advisers and transfers the payment tothe sub-advisers. Then the sub-advisers purchase securities and reportthe result back to the system of the present invention in step 1124.Documentation, e.g., confirmations of buy and/or sell requests, are sentto the investment manager to indicate that the securities have beenpurchased or sold as requested.

When investing in an SVP fund in which an SVP writer is used, the SVPwriter contacts the sub-adviser to request information regardingyield-to-maturity (YTM) of the purchased securities, as shown in step1126. Using the YTM information, the SVP writer can set the initialtargeted return to the YTM plus any adjustments agreed upon by thepolicy owner and the SVP writer. The system then imports the YTM fromthe sub-adviser and imports the initial credit rate information and theadjusted credit rate information from the SVP writer in addition toreceiving the agreed upon adjustments from the investment manager. Thesystem uses this information to calculate and compare the targetedreturn and applicable time period versus what was reported by the SVPwriter. Any discrepancies are reported to the SVP writer andconfirmation of the correct targeted return is reported to the policyowner.

Based on these calculations and comparisons, in step 1128, an initialunit value of the new fund is set and, in step 1130, the system storesthe initial unit value of the policy.

In addition to the processing steps required to create or initialize afund, processing is required at regular intervals to track existingfunds. The processing steps shown in FIG. 12 are repeated frequently,e.g., daily, to support all of the available funds, including the StableValue Protected funds, but the actual time between processing steps maybe adjusted on a frequent or daily basis, step 1204 is performed tocalculate the actual fees for Mortality and Expense (M&E) accountmanagement by the investment manager, sub-adviser and SVP writer, ifapplicable. The investment manager, sub-adviser and SVP writer and otherentities that help to manage a fund each are members of a group calledcollectively hereafter a management group. The number of members of themanagement group depends on how the fund is managed. The M&E fee iscalculated as W basis points per year divided by 365 multiplied by theinvestment value of the prior day. The account management fee iscalculated as X basis points per year divided by 365 multiplied by theinvestment value of the prior day. The sub-adviser's fee is calculatedas Y basis points per year divided by 365 multiplied by the investmentvalue of the prior day, and the SVP writer's fee is calculated as Zbasis points per year divided by 365 multiplied by the investment valueof the prior day. These values are calculated by the system of thepresent invention to track the daily value of the funds.

In steps 1212 and 1216, the system calculates credits due to thetargeted return and a present daily investment value. The system importsthe daily investment value from the investment manager and compares itwith the investment value due according to the policy. Any discrepanciesare reported. In step 1218, the system notifies the SVP writer of thecurrent day's investment value and the value of the underlyingsecurities.

After step 1219, the system can pass control to either step 1220 or 1222depending on how the system is configured. Step 1220 provides themanagement group with their credits right away, and step 1222 delayspayment for a given period. In step 1220, the investment manager removesM&E fees, account management fees, “policy” sub-adviser fees and SVPfees, when applicable, from the value of the underlying securities forthe present day and then moves the money to funds designated by feerecipients. The system also imports, in step 1220, the value of theunderlying securities from the investment manager, that is the valuebefore and after the reduction due to fees. The system additionallycalculates an independent estimate of the value of the securities andcompares it with the imported value. Discrepancies are reported to thepolicy owner. Alternatively, from step 1219, control could be passed tostep 1222 so that each fee receiving entity may purchase “fee units”each day and accumulate them for a given period, e.g., until the end ofthe month.

In step 1219, the system calculates a policy value according to theformula: policy value for the present day equals policy value of theprevious day multiplied by (investment unit value for the present daydivided by investment unit value for the previous day). The systemstores the policy value for the present day. Further, in step 1219, thesystem calculates the policy unit value for the present day according tothe formula: policy unit value for the present day equals policy valueof the present day divided by the number of units held. The systemstores the policy unit value.

As shown in FIG. 13, at the end of a first time period, e.g., at the endof each month, the accumulated M&E fee units which were aggregated areprocessed. In step 1304, the system sells accumulated M&E fee units tothe investment manager at the investment unit value for the present dayon behalf of the carrier, Account Manager, SVP writer and sub-adviser,and the investment manager adjusts the number of investment units heldby the system. The system imports the units adjusted from the investmentmanager and independently calculates the number of units to be sold. Thereported units and independently calculated units are compared and anydiscrepancies are reported to the investment manager. Further, if “feeunits” were accumulated above in step 1222, then the account manager,SVP writer and sub-advisor sell “fee units” to the investment manager atthe investment unit value for the present day. In step 1308, theinvestment manager then adjusts the number of investment units held byeach (i.e., the carrier, the account manager, SVP writer and sub-advisorcollect their accrued fees). Also, if fee units were purchased, then theinvestment manager removes the value of the “fee units” from the valueof the underlying securities and transfers cash to the account manager,SVP writer and sub-advisor. The system imports the value of thesecurities transferred and independently calculates the value of thesecurities transferred. The system compares the reported andindependently calculated values of the securities and reports anydiscrepancies to the investment manager.

As shown in FIG. 14, various accounting procedures need to be performedat the end of a second time period, e.g., on the monthly anniversary ofthe creation of the policy. In step 1404, the policy owners sell policyunits to the system to pay for monthly Costs of Insurance (COI) fees andadministration fees. Based on the policy units sold, the system adjuststhe number of policy units held by the policy holder. The system storesthe COI value along with the amount of the administration fees and thenumber of policy units adjusted. In step 1408, the system sells anequivalent dollar amount of investment units to the investment manager,and the system adjusts the number of investment units held by thesystem. The system imports the adjusted number of units from theinvestment manager and independently calculates the number of unitsaccording to the value of the fees. The calculated units are comparedwith the reported units and any discrepancies are reported to theinvestment manager.

In step 1412, the account manager (insurance carrier) removes the valueof the COI and administration fees from the value of the underlyingsecurities and transfers cash to the system. The system imports thevalue of the underlying securities prior to and subsequent to removal offees by the investment manager, and the system calculates the value ofthe underlying securities after the fees have been removed. The systemthen compares the reported value of the underlying securities with thecalculated value of the underlying securities and any discrepancies arereported to the investment manager.

In step 1416, the system calculates an ongoing mortality reserveactivity including cost of insurance, retention and contribution tomortality reserve. The system calculates the cost of insurance,retention and contribution to mortality reserve.

As shown in FIG. 15, at the end of a third time period, e.g., on thelast day of the second month of the quarter, the system of the presentinvention collects and processes additional information from theinvestment manager and any sub-advisors. In step 1504, from theinvestment manager, the SVP writer collects information regarding thebook value and market value of funds, the value of underlying securitiesand the investment value of the funds. This information is imported bythe system of the present invention, and the system then compares thestored value of the underlying securities with the investment value. Anydiscrepancies are reported to the investment manager. In step 1508, theSVP writer collects information from a sub-advisor regarding duration ofthe underlying securities and the yield-to-maturity. The system thenimports the duration of securities and yield-to-maturity from the SVPwriter. The system independently calculates the duration andyield-to-maturity of the stored securities and compares the calculatedand reported duration and YTM. Any discrepancies are reported to the SVPwriter.

As shown in FIG. 16, at the end of a third time period, e.g., ten daysprior to the beginning of the quarter, additional processing isperformed for SVP funds. As shown in step 1604, the SVP writercalculates targeted return for the upcoming quarter, and the systemimports the calculated rate from the SVP writer. The system thencalculates the targeted return based on the stored duration and YTM, andthe calculated targeted return is compared with the reported targetedreturn. Any discrepancies between the two targeted returns are reportedto the SVP writer.

FIG. 17 is a flowchart which shows the single processing step, 1704,involved upon the death of an insured fund participant. The systemprocesses the death claim by calculating the net amount at risk, thecash values released, the interest from date of death, the adjustmentsto each individual fund (with aggregate policies) including COI chargesfrom date of death and administration charges. The system stores thepolicy data.

Obviously, numerous modifications and variations of the presentinvention are possible in light of the above teachings (i.e., types ofassets are interchangeable between the Defined Contribution and DefinedBenefit plans). It is therefore to be understood that within the scopeof the appended claims, the invention may be practiced otherwise than asspecifically described herein.

1. A life insurance policy management system comprising: a policygenerator for generating a life insurance policy including a stablevalue protected investment with an initial value based on a value ofunderlying securities of the stable value protected investment; a feecalculator for calculating fees for members of a management group whichmanage the life insurance policy; a credit calculator for calculatingcredits for the stable value protected investment of the life insurancepolicy; an investment calculator for determining an investment value anda value of the underlying securities of the stable value protectedinvestment for the current day; a policy calculator for calculating apolicy value and a policy unit value for the current day; digitalstorage for storing the policy unit value for the current day; and adebitor for removing a value of the fees for members of the managementgroup which manages the life insurance policy.
 2. The system accordingto claim 1, wherein the policy generator comprises: a premium calculatorfor determining premium amounts and additional premium charges; aninvestor for investing a specified amount of money; and an initial valuecalculator for calculating an initial unit value of the life insurancepolicy, wherein the initial unit value of the life insurance policy isstored in the digital memory.
 3. The system of claim 2, furthercomprising: means for notifying an investment manager of an amount ofmoney to invest; means for notifying a sub-adviser of the amount toinvest; means for wiring money to the sub-adviser; means for purchasingsecurities; and means for sending documentation to the investmentmanager.
 4. The system of claim 1, further comprising: notifying meansfor notifying a stable value protected investment writer of theinvestment value and the value of the underlying securities of thestable value protected investment for the current day.
 5. The system ofclaim 1, further comprising: a cash transferrer for transferring cash tothe members of the management group based on fees due to the members ofthe management group.
 6. The system according to claim 1, furthercomprising: selling means for selling policy units held by a policyowner to the investment manager system to pay for cost of insurance feesand administration fees; adjusting means for adjusting a number ofpolicy units held by the policy owner; selling means for selling thenumber of policy units adjusted by the adjusting means; removing meansfor removing from the underlying securities a value equivalent to thenumber of policy units adjusted by the adjusting means; transferringmeans for transferring cash to a carrier; and mortality calculatingmeans for calculating ongoing mortality reserve activity.
 7. The systemaccording to claim 1, further comprising: a data collector forcollecting information from sub-advisers on a duration andyield-to-maturity of the underlying securities of the stable valueprotected investment.
 8. A system according to claim 1, furthercomprising a calculator for calculating a targeted return for anupcoming time period.
 9. A method for managing a life insurance policycomprising: generating a life insurance policy including a stable valueprotected investment with an initial value based on a value ofunderlying securities of the stable value protected investment;calculating fees for members of a management group which manage the lifeinsurance policy; calculating credits for the stable value protectedinvestment of the life insurance policy; determining an investment valueand a value of the underlying securities of the stable value protectedinvestment for the current day; calculating a policy value and a policyunit value for the current day; storing the policy unit value for thecurrent day; and removing a value of the fees for members of themanagement group which manage the life insurance policy.
 10. The methodaccording to claim 9, wherein the step of generating a policy comprises:determining premium amounts; determining additional premium charges;investing a specified amount of money; calculating an initial unit valueof the life insurance policy; and storing the initial unit value of thelife insurance policy.
 11. The method of claim 10, wherein the step ofinvesting comprises: notifying an investment manager of an amount ofmoney to invest; notifying a sub-adviser of the amount to invest; wiringmoney to the sub-advisers; purchasing securities; and sendingdocumentation to the investment manager.
 12. The method of claim 9,further comprising the step of notifying a stable value protectedinvestment writer of the investment value and the value of theunderlying securities of the stable value protected investment for thecurrent day.
 13. The method of claim 9, wherein removing the value ofthe fees comprises: transferring cash to the members of the managementgroup based on the fees owed to the members of the management group. 14.The method according to claim 9, further comprising the steps of:selling policy units held by a policy owner to the investment manager topay for cost of insurance fees and administration fees; adjusting anumber of policy units held by the policy owner; selling the number ofpolicy units adjusted in the adjusting step; removing from theunderlying securities a value equivalent to the number of policy unitsadjusted in the adjusting step; transferring cash to a carrier; andcalculating ongoing mortality reserve activity.
 15. The method accordingto claim 9, further comprising the step of: collecting information fromsub-advisers on a duration and yield-to-maturity of the underlyingsecurities of the stable value protected investment.
 16. The method foraccording to claim 9, further comprising the step of calculating atargeted return for a time period.
 17. The method according to claim 9,wherein the steps of claim 9 are performed by a computer.
 18. A computerreadable media for controlling a computer to perform the steps of:generating a life insurance policy including a stable value protectedinvestment with an initial value based on a value of underlyingsecurities of the stable value protected investment; calculating feesfor members of a management group which manage the life insurancepolicy; calculating credits for the stable value protected investment ofthe life insurance policy; determining an investment value and a valueof the underlying securities of the stable value protected investmentfor the current day; calculating a policy value and a policy unit valuefor the current day; storing the policy unit value for the current day;and removing the fees for members of the management group which managethe life insurance policy.
 19. A computer system for administering anexisting life insurance policy, including a stable value protectedinvestment based on underlying securities of the stable value protectedinvestment, the computer system comprising: a credit calculator forcalculating credits for the stable value protected investment of thelife insurance policy; an investment calculator for determining aninvestment value and a value of the underlying securities of the stablevalue protected investment for the current day; a policy valuecalculator for calculating a policy value and a policy unit value forthe current day; and digital storage for storing at least one of thepolicy value and the policy unit value for the current day.
 20. Thesystem as claimed in claim 19, further comprising a fee calculator forcalculating fees for members of a management group which manage the lifeinsurance policy.
 21. The system as claimed in claim 20, furthercomprising a debitor for removing a value of the fees for members of themanagement group which manages the life insurance policy.
 22. The systemas claimed in claim 20, further comprising an accumulator foraccumulating fees on behalf of the management group.
 23. The system asclaimed in claim 19, further comprising notifying means for notifying astable value protected investment writer of the investment value and thevalue of the underlying securities of the stable value protectedinvestment for the current day.
 24. The system as claimed in claim 20,further comprising a cash transferrer for transferring cash to themembers of the management group based on the fees owed to the members ofthe management group.
 25. The system as claimed in claim 20, furthercomprising: selling means for selling policy units held by a policyowner to an investment manager system to pay for cost of insurance feesand administration fees; adjusting means for adjusting a number ofpolicy units held by the policy owner; selling means for selling thenumber of policy units adjusted by the adjusting means; removing meansfor removing from the underlying securities a value equivalent to thenumber of policy units adjusted by the adjusting means; transferringmeans for transferring cash to a carrier; and mortality calculatingmeans for calculating ongoing mortality reserve activity.
 26. The systemas claimed in claim 19, further comprising means for collectinginformation from sub-advisers on a duration and yield-tomaturity of theunderlying securities of the stable value protected investment.
 27. Asystem as claimed in claim 19, further comprising a calculator forcalculating a targeted return for an upcoming time period.
 28. A methodfor managing a life insurance policy, including a stable value protectedinvestment based on underlying securities of the stable value protectedinvestment, the method comprising the steps of: (a) calculating creditsfor the stable value protected investment of the life insurance policy;(b) determining an investment value and a value of the underlyingsecurities of the stable value protected investment for the current day;(c) calculating a policy value and a policy unit value for the currentday; and (d) storing at least one of the policy value and the policyunit value for the current day.
 29. The method as claimed in claim 28,further comprising calculating fees for members of a management groupwhich manage the life insurance policy.
 30. The method as claimed inclaim 29, further comprising removing the fees for members of themanagement group which manage the life insurance policy.
 31. The methodas claimed in claim 29, further comprising accumulating fees on behalfof the management group.
 32. The method as claimed in claim 29, furthercomprising the step of notifying a stable value protected investmentwriter of the investment value and the value of the underlyingsecurities of the stable value protected investment for the current day.33. The method as claimed in claim 29, further comprising: transferringcash to the members of the management group based on fees owed to themembers of the management group.
 34. The method as claimed in claim 28,further comprising the steps of: selling policy units held by a policyowner to an investment manager to pay for cost of insurance fees andadministration fees; adjusting a number of policy units held by thepolicy owner; selling the number of policy units adjusted in theadjusting step; removing from the underlying securities a valueequivalent to the number of policy units adjusted in the adjusting step;transferring cash to a carrier; and calculating ongoing mortalityreserve activity.
 35. The method as claimed in claim 28, furthercomprising the step of collecting information from sub-advisers on aduration and yield-to-maturity of the underlying securities of thestable value protected investment.
 36. The method as claimed in claim28, further comprising the step of calculating a targeted return for atime period.
 37. The method as claimed in claim 28, wherein the steps(a)-(d) are performed by a computer.
 38. The method according to claim9, wherein the step of determining the investment value and a value ofthe underlying securities of the stable value protected investment forthe current day comprises adjusting the investment value to amortize forat least one initial fee.
 39. The method according to claim 38, whereinthe at least one fee comprises at least one of a premium tax, a DAC tax,and a load.
 40. The method according to claim 28, wherein the step ofdetermining the investment value and a value of the underlyingsecurities of the stable value protected investment for the current daycomprises adjusting the investment value to amortize for at least oneinitial fee.
 41. The method according to claim 40, wherein the at leastone fee comprises at least one of a premium tax, a DAC tax, and a load.42. A life insurance policy management system comprising: a policygenerator for generating a life insurance policy including a stablevalue protected investment with an initial value based on a value ofunderlying securities of the stable value protected investment; a feecalculator for calculating fees for members of a management group whichmanage the life insurance policy; a credit calculator for calculatingcredits for the stable value protected investment of the life insurancepolicy; an investment calculator for determining an investment value anda value of the underlying securities of the stable value protectedinvestment for the current day; a policy calculator for calculating apolicy value and a policy unit value for the current day; digitalstorage for storing the policy unit value for the current day; and anaccumulator for accumulating fees on behalf of the management group. 43.The system according to claim 42, wherein policy generator comprises: apremium calculator for determining premium amounts and additionalpremium charges; an investor for investing a specified amount of money;and an initial value calculator for calculating an initial unit value ofthe life insurance policy, wherein the initial unit value of the lifeinsurance policy is stored in the digital memory.
 44. The system ofclaim 43, further comprising: means for notifying an investment managerof an amount of money to invest; means for notifying a sub-adviser ofthe amount to invest; means for wiring money to the sub-adviser; meansfor purchasing securities; and means for sending documentation to theinvestment manager.
 45. The system of claim 42, further comprising:notifying means for notifying a stable value protected investment writerof the investment value and the value of the underlying securities ofthe stable value protected investment for the current day.
 46. Thesystem of claim 42, further comprising: a cash transferrer fortransferring cash to the members of the management group based on feesdue to the members of the management group.
 47. The system according toclaim 42, further comprising: selling means for selling policy unitsheld by a policy owner to the investment manager system to pay for costof insurance fees and administration fees; adjusting means for adjustinga number of policy units held by the policy owner; selling means forselling the number of policy units adjusted by the adjusting means;removing means for removing from the underlying securities a valueequivalent to the number of policy units adjusted by the adjustingmeans; transferring means for transferring cash to a carrier; andmortality calculating means for calculating ongoing mortality reserveactivity.
 48. The system according to claim 42, further comprising: adata collector for collecting information from sub-advisers on aduration and yield-to-maturity of the underlying securities of thestable value protected investment.
 49. A system according to claim 42,further comprising a calculator for calculating a targeted return for anupcoming time period.
 50. The system according to claim 42, wherein theinvestment calculator comprises an adjuster for adjusting the investmentvalue to amortize for at least one initial fee.
 51. The system accordingto claim 50, wherein the at least one fee comprises at least one of apremium tax, a DAC tax, and a load.
 52. A method for managing a lifeinsurance policy comprising: generating a life insurance policyincluding a stable value protected investment with an initial valuebased on a value of underlying securities of the stable value protectedinvestment; calculating fees for members of a management group whichmanage the life insurance policy; calculating credits for the stablevalue protected investment of the life insurance policy; determining aninvestment value and a value of the underlying securities of the stablevalue protected investment for the current day; calculating a policyvalue and a policy unit value for the current day; storing the policyunit value for the current day; and accumulating fees on behalf of themanagement group for managing the life insurance policy.
 53. The methodaccording to claim 52, wherein the step of generating a policycomprises: determining premium amounts; determining additional premiumcharges; investing a specified amount of money; calculating an initialunit value of the life insurance policy; and storing the initial unitvalue of the life insurance policy.
 54. The method of claim 53, whereinthe step of investing comprises: notifying an investment manager of anamount of money to invest; notifying a sub-adviser of the amount toinvest; wiring money to the sub-advisers; purchasing securities; andsending documentation to the investment manager.
 55. The method of claim52, further comprising the step of notifying a stable value protectedinvestment writer of the investment value and the value of theunderlying securities of the stable value protected investment for thecurrent day.
 56. The method of claim 52, wherein removing the value ofthe fees comprises: transferring cash to the members of the managementgroup based on the fees owed to the members of the management group. 57.The method according to claim 52, further comprising the steps of:selling policy units held by a policy owner to the investment manager topay for cost of insurance fees and administration fees; adjusting anumber of policy units held by the policy owner; selling the number ofpolicy units adjusted in the adjusting step; removing from theunderlying securities a value equivalent to the number of policy unitsadjusted in the adjusting step; transferring cash to a carrier; andcalculating ongoing mortality reserve activity.
 58. The method accordingto claim 52, further comprising the step of: collecting information fromsub-advisers on a duration and yield-to-maturity of the underlyingsecurities of the stable value protected investment.
 59. The method foraccording to claim 52, further comprising the step of calculating atargeted return for a time period.
 60. The method according to claim 52,wherein the steps of claim 52 are performed by a computer.
 61. Themethod according to claim 52, wherein the investment calculatorcomprises an adjuster for adjusting the investment value to amortize forat least one initial fee.
 62. The method according to claim 61, whereinthe at least one fee comprises at least one of a premium tax, a DAC tax,and a load.
 63. A computer readable media for controlling a computer toperform the steps of: generating a life insurance policy including astable value protected investment with an initial value based on a valueof underlying securities of the stable value protected investment;calculating fees for members of a management group which manage the lifeinsurance policy; calculating credits for the stable value protectedinvestment of the life insurance policy; determining an investment valueand a value of the underlying securities of the stable value protectedinvestment for the current day; calculating a policy value and a policyunit value for the current day; storing the policy unit value for thecurrent day; and accumulating fees on behalf of the management group formanaging the life insurance policy.
 64. The computer readable mediumaccording to claim 63, wherein the step of determining the investmentvalue and a value of the underlying securities of the stable valueprotected investment for the current day comprises adjusting theinvestment value to amortize for at least one initial fee.
 65. Thecomputer readable medium according to claim 64, wherein the at least onefee comprises at least one of a premium tax, a DAC tax, and a load. 66.The system according to claim 8, wherein the targeted return is adjustedto amortize at least one initial fee.
 67. The system according to claim1, further comprising a receiver for receiving a targeted return for anupcoming time period.
 68. The system according to claim 67, wherein thetargeted return is adjusted to amortize at least one initial fee. 69.The method according to claim 16, wherein the targeted return isadjusted to amortize at least one initial fee.
 70. The method accordingto claim 9, further comprising receiving a targeted return for anupcoming time period.
 71. The method according to claim 70, wherein thetargeted return is adjusted to amortize at least one initial fee. 72.The computer readable media according to claim 18, further controllingthe computer to perform the step of calculating a targeted return for anupcoming time period, wherein the targeted return is adjusted toamortize at least one initial fee.
 73. The computer readable mediaaccording to claim 18, further controlling the computer to perform thestep of receiving a targeted return for an upcoming time period.
 74. Thecomputer readable media according to claim 73, wherein the targetedreturn is adjusted to amortize at least one initial fee.
 75. The systemaccording to claim 27, wherein the targeted return is adjusted toamortize at least one initial fee.
 76. The system according to claim 19,further comprising a receiver for receiving a targeted return for anupcoming time period.
 77. The system according to claim 76, wherein thetargeted return is adjusted to amortize at least one initial fee. 78.The method according to claim 36, wherein the targeted return isadjusted to amortize at least one initial fee.
 79. The method accordingto claim 28, further comprising receiving a targeted return for anupcoming time period.
 80. The method according to claim 79, wherein thetargeted return is adjusted to amortize at least one initial fee. 81.The system according to claim 49, wherein the targeted return isadjusted to amortize at least one initial fee.
 82. The system accordingto claim 42, further comprising a receiver for receiving a targetedreturn for an upcoming time period.
 83. The system according to claim82, wherein the targeted return is adjusted to amortize at least oneinitial fee.
 84. The method according to claim 59, wherein the targetedreturn is adjusted to amortize at least one initial fee.
 85. The methodaccording to claim 52, further comprising receiving a targeted returnfor an upcoming time period.
 86. The method according to claim 85,wherein the targeted return is adjusted to amortize at least one initialfee.
 87. The system according to claim 1, wherein the investmentcalculator comprises an adjuster for adjusting the investment value toamortize for at least one initial fee.
 88. The system according to claim87, wherein the at least one fee comprises at least one of a premiumtax, a DAC tax, and a load.
 89. The computer readable media according toclaim 18, wherein the step of determining the investment value and avalue of the underlying securities of the stable value protectedinvestment for the current day comprises adjusting the investment valueto amortize for at least one initial fee.
 90. The computer readablemedia according to claim 89, wherein the at least one fee comprises atleast one of a premium tax, a DAC tax, and a load.
 91. The systemaccording to claim 19, wherein the investment calculator comprises anadjuster for adjusting the investment value to amortize for at least oneinitial fee.
 92. The system according to claim 91, wherein the at leastone fee comprises at least one of a premium tax, a DAC tax, and a load.93. The computer readable media according to claim 63, furthercontrolling the computer to perform the step of calculating a targetedreturn for an upcoming time period, wherein the targeted return isadjusted to amortize at least one initial fee.
 94. The computer readablemedia according to claim 63, further controlling the computer to performthe step of receiving a targeted return for an upcoming time period. 95.The computer readable media according to claim 94, wherein the targetedreturn is adjusted to amortize at least one initial fee.
 96. The systemaccording to claim 1, further comprising a receiver for receiving aninvestment value.
 97. The system according to claim 96, wherein thereceived investment value is adjusted to amortize at least one initialfee.
 98. The method according to claim 9, further comprising receivingan investment value.
 99. The method according to claim 98, wherein thereceived investment value is adjusted to amortize at least one initialfee.
 100. The computer readable media according to claim 18, furthercontrolling the computer to perform the step of receiving an investmentvalue.
 101. The computer readable media according to claim 100, whereinthe received investment value is adjusted to amortize at least oneinitial fee.
 102. The system according to claim 19, further comprising areceiver for receiving an investment value.
 103. The system according toclaim 102, wherein the received investment value is adjusted to amortizeat least one initial fee.
 104. The method according to claim 28, furthercomprising receiving an investment value.
 105. The method according toclaim 104, wherein the received investment value is adjusted to amortizeat least one initial fee.
 106. The system according to claim 42, furthercomprising a receiver for receiving an investment value.
 107. The systemaccording to claim 106, wherein the received investment value isadjusted to amortize at least one initial fee.
 108. The method accordingto claim 52, further comprising receiving an investment value.
 109. Themethod according to claim 108, wherein the received investment value isadjusted to amortize at least one initial fee.
 110. The computerreadable media according to claim 63, further controlling the computerto perform the step of receiving an investment value.
 111. The computerreadable media according to claim 110, wherein the received investmentvalue is adjusted to amortize at least one initial fee.